200. Yes, it was Mr Rendel when he said what
proportion of unsuccessful attempts would have induced you to
have abandoned the programme and you said it would have had to
have been a very high proportion of non trivial problems. You
said it would have depended on the type of reason
(Sir Nicholas Montagu) With respect, Mr Gardiner,
I do not think I said anything of the kind. I think that what
I said to Mr Rendel was that I would have needed to be persuaded
that the internet service itself was not functioning properly
and was not fit for the purpose rather than that people were finding
it difficult to submit returns.

201. Sir Nicholas, the record will show what
you said. If I am wrong I am wrong.
(Sir Nicholas Montagu) Neither the software nor the
forms were faulty. That would have been an example of a system
not fit for purpose. People had difficulties, we have admitted
that. I have said all along, it was a lot less than perfect. We
have worked on it, we have reversed the trend.

202. I am running out of time. I do have to
press. I take it that what you are saying to me is that you have
no data on the percentage of unsuccessful attempts that were minor
and technical in nature?
(Sir Nicholas Montagu) I think that is right, Mr Gardiner,
and I would include in "minor and technical" people
bashing lots of times. I have to say that the fact that we have
reversed it now suggests that probably the majority were.

204. He might be asking you about the internet
in the Royal Palace, watch it.
(Sir Nicholas Montagu) He might indeed. As he knows
I will do my very best to answer within the limits of propriety.

Mr Williams

205. I would never ask you to do anything improper.
(Sir Nicholas Montagu) Never, Mr Williams, it would
be uncharacteristic.

206. I will follow on Mr Trickett and Mr Jenkins.
The fact of the matter is you have not saved anything so far but
then the set up costs have to be taken into account as well. I
am not making too big an issue of it in that sense. You did tell
us, and you made a point of emphasising it at least once later
on, that the project was subject to a rigorous business case examination.
(Sir Nicholas Montagu) Yes.

207. So what is the breakeven uptake of this
that has been revealed by this rigorous examination?
(Sir Nicholas Montagu) Again, I have to give you the
same answer, Mr Williams. I do not think that one can say that
at some point in the future

208. I did not ask you when, I asked you what?
(Sir Nicholas Montagu) Well, I have said alsoI
have signed up to the figures in Sir John's reportthat
with 50 per cent take up we would save £30 million a year.
That is an estimate based on the savings from manual processes
and that is based on 50 per cent take up across the piece. I do
not think I could give you a single breakeven figure, and it would
be misleading if I said I could confidently predict a breakeven
point. What I can say, and have said, is that by 2005 there will
be the complete range of options for people to do business with
us electronically. Now this is a complex range, it is not just
filing, it is looking at records, it is making payments. It is
not a simple pay off issue.

209. We understand that but then it was a rigorous
business case examination. You have said it not me.
(Sir Nicholas Montagu) Mr Williams, I know I did.
Againyou have been a Ministerif, during your time
at the DTI, you had said to your officials "As a matter of
Government policy we are going to do this" you would have
expected them to deliver it in the way that provided the best
value for money. You would not have expected them to come back
to you and say "Minister, this does not wash its face".
I am not saying that this does not, what I am sayingNo,
please, Mr Williams, this is an important point.

210. Carry on.
(Sir Nicholas Montagu) What we are talking about are
the systems required to deliver a Government pledge. It is the
same whether it is 100 per cent e-availability or new tax credits.
We are not looking for savings, we are looking for value for money.
We are looking for best price in the market and so on.

211. All I can say, Sir Nicholas, is it is just
as well you and I did not work together when I was at the DTI.
(Sir Nicholas Montagu) We did, Mr Williams, but you
have forgotten it.

Chairman: Touché.

212. I well remember an incident when I was
in the DTI, well it was just the Department of Industry when I
was there, when I found a medium ranking official waiting in the
outer office and I said "Are you wanting to come in and see
me?" and he said "No". I said "I will leave
you with my PS" and I asked my PS afterwards what this personI
do not want to use his namewanted. He said "Well,
he has to put a submission to you and he has come to get a steer."
I said "What do you mean he has come to get a steer?"
He said "He wants to know what your line of thinking is".
I said "He is not paid to know my line of thinking, he is
paid to give me his line of thinking. What I want as a Minister
is to know if I am going to make a fool of myself, I want to find
out in this office rather than at the Dispatch Box on the floor
of the House of Commons". Your understanding of my thought
process is somewhat inappropriate.
(Sir Nicholas Montagu) Well I think in this case,
Mr Williams, there is no chance of the Prime Minister making a
fool of himself with his 100 per cent e-availability pledge on
the basis of the systems that the Revenue is putting in place.
That is an important pledge for this Government and it is one
which, as civil servants, we are committed to deliver to best
effect and to the best value within the constraints of policy
in exactly the same way as we are committed to delivering for
the Chancellor the best systems for new tax credits.

213. Now we have got it, if it goes wrong it
is the Prime Minister's fault.
(Sir Nicholas Montagu) On the contrary, if it goes
wrong

214. That is what you said.
(Sir Nicholas Montagu) I did not at all. I said that
I am confident there will be no cause for the Prime Minister to
be embarrassed. If it goes wrong, it will be our fault for failing
to deliver his pledge. As I have indicated repeatedly, we have
every prospect of succeeding in delivering the Revenue bit of
it.

215. Paragraph 7 in Appendix 1 uses a rather
elegant phrase. It says, "The Inland Revenue used its build
and learn approach . . .". What this really means is that
it went off half-baked and you have elevated going off half-baked
into being an intellectual process, does it not?
(Sir Nicholas Montagu) I think, Mr Williams, if I
may say so, this is a generational thing. You and I might both
have thought that way, but my young whizz-kids tell me not. What
Sir John says is that being at the forefront of the public sector's
drive to develop electronic services carries increased risks,
and he also says that our experience acts as a valuable exemplar
for other government departments. You learn from experience.

216. You have not learned from experience. I
find this rather interesting. It is an interesting change in position
here. I remember, going way back in history, in my early days
on this Committee when we dealt with the Wessex Health Authority,
and it started to develop what I thought was an extremely imaginative
concept, a regional information service where every doctor at
his desk would be able to find out what treatment was available
when, where, when the hospital beds were available, but it did
not work. The NAO and this Committee criticised it for not having
been thought through. The idea was all right but it was not thought
through. Over a series of cases this Committee has looked at in
relation to information technology, we have said the same thing,
that one of the problems is that people go off and try and set
up systems without knowing precisely what they need, and then
are surprised when a large amount of money is wasted and when
they have not got a service which delivers. That is where you
are, is it not?
(Sir Nicholas Montagu) No, Mr Williams. No money has
been wasted.

217. That remains to be seen.
(Sir Nicholas Montagu) You have raised an important
point, I must be allowed to reply. Sir John has looked rigorously
at this. He has not found any evidence of wastage, on the contrary,
he has found as I have quoted. He has also said the Inland Revenue
has adopted a number of good practices, such as build and learn,
from the private sectornot given, Mr Williams, to wasting
money gratuitouslyon how to manage e-service projects and
to minimise the risks of failure and of applying lessons learned
to future projects, such as the planned corporation tax e-service.
I make the point again, this is quite literally a world-beating
service, functioning in direct response to what customers have
told us they wanted, worked out with them, that is what the build
and learn approach means, and on-line within eight months of the
workshop which gave rise to it.

218. That looks very good from where you are,
from where we are we see a system which has completely failed
to come anywhere near meeting any of its targets. Even in relation
to the question you were asked early on about EDSand may
I say that EDS are very good employers in my own constituency,
so I have no reason to knock themyou did say, "EDS
did not fail to deliver, it is just the system did not work .
. ."
(Sir Nicholas Montagu) Mr Williams, it worked perfectly.